Apple Inc. (NASDAQ:AAPL) shares, whose downward trend have been subject of articles and analysis, struck a new low on Friday; its lowest closing so far since the shares started their one-way slide in September last year.
Apple stock fell another 2.5 percent to close at $430, taking its losses nearly 40 percent from its peak.
So what should investors do with the money they have invested in the company, especially when it rose to its highest level and everyone was urging them to still buy the stock?
There’s a change in Apple’s business and that is getting reflected in its stock pricing.
It is no longer a company which used to some out with an iPhone and an iPad once in a while. Somewhat like its Mac laptops and desktops, its mobile devices business has changed.
As has been already forecast by analysts and experts, the high-growth days of Apple are over. From a growth company it is becoming a value stock, consolidating on the growth that has sustained it so many years.
An immediate reason for the sell-off is that Apple’s quarterly earnings are no longer growing the way they used to. In fact in the current quarter, its earnings are expected to shrink and that is triggering the sell-off.
The rumours about order reductions for its iPhones have also caused some damage, especially as the company has not bothered to clarify the information. People are not sure if the sales of the iPhones are decelerating as fast as they are made out to be and that is spooking out a lot of investors.
There are a whole lot of refreshes that Apple is expected to produce this year and demand for a lot of last year’s products have fractionally paused as customers debate whether to wait for the new upgrade or buy the exiting one anyway.
Also, and this cannot be stressed enough, there is a lot more competition out there, with two industry ex-stalwarts if you please, Nokia and Blackberry blundering their way into the smartphone market and making a lot of noise about it.